CLC – CCI National Moot Court Competition, 2019 [URN-1914]

TEAM CODE-[URN 1914]

Campus Law Centre, Faculty of Law, University of Delhi

The CLC-CCI Moot Court on Competition Law, 2019

BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Competition Appeal (AT) No.___/2019

PG Pacedena Private Limited,

Qui Pacedena Private Limited,

Tam Pacedena Private Limited, and

Trade Association

APPELLANTS
V.

Competition Commission of Pacadena and

Pacedena National Railways RESPONDENTS

ON BEHALF OF THE RESPONDENT

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TABLE OF CONTENTS

Contents
LIST OF ABBREVIATION 3

INDEX OF AUTHORITIES 4

STATUTES 4

BOOKS 4

CASES 4

WEBSITES REFFERED 7

ARTICLES, REPORTS & RESEARCH PAPERS 7

STATEMENT OF JURISDICTION 8

STATEMENT OF FACTS 9

STATEMENT OF ISSUES 12

SUMMARY OF ARGUMENTS 13

ARGUMENTS ADVANCED 14

ISSUE 1: 14

ISSUE 2: 14

ISSUE 3: 14

PRAYER OF RELIEF 15

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LIST OF ABBREVIATION

Abbreviated use Expansion

AAEC Appreciable Adverse Effect on Competition
Art Article
CCZ Competition Commission of Zion
CCI Competition Commission of India
CIAZ Consumer Interest Association of Zion
Co Company
COMPAT Competition Appellate Tribunal
DG Director General
EC European Commission
ECJ European Court of Justice
ECR European Court report
Edn Edition
EU European Union
Ltd Limited
MRTPC Monopolies and Restrictive Trade Practices Commission
OECD Organisation for Economic Co-operation and Development
OJ Official Journal
Ors Others
Pvt Private
r/w read with
S Section
SC Supreme Court of India
TFEU Treaty on the Functioning of the European Union
USSC Supreme Court of the United States
& And
¶ Paragraph
INDEX OF AUTHORITIES

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STATUTES

The Constitution of India

Competition Act of India, 2002

BOOKS

1. Richard Whish & David Bailey, Competition Law (8th Edition, 2015)
2. Dr. V.K. Agarwal, Competition Act, 2002, 2011
Phillip E.Areeda &Herbert J.Hovenkamp, “Antitrust Law:An Analysis Of Antitrust Principles
And Their Application”para.1434(D)(2)(2d Ed. 2000)

CASES
Schwegmann Bros. v. Calvert Corp., 341 U. S. 384.
Mr. Ramakant Kini v. Dr. L.H. Hiranandani Hospital, CCI Case No. 39/2012.
American Tobacco Co .v United States,  328 US 781, 785-788 (1946).
United States v. Paramount Pictures, Inc.,334 U.S. 131 (1948)
Builders Association of India v Cement Manufacturers Association and Ors, CCI Case No
29/2010 , In Re: Alleged Cartelization by Cement Manufacturers RTPE 52 of 2006.
Technip SA v. SMS Holding (P) Ltd. & Ors.(2005) 5 SCC 465, Guinness PLC and Distillers
Company PLC
Nintendo OJ [2003] L 255/33, Contact Data v. Commission [2009] ECRII-1021, Activision
Blizzard Germany GmbH v. Commission [2011] ECR I-419.
Suiker Unie v. Commission Cases 40/73[1975]ECR 1663.
 Escorts Limited and Ors. Vs. Competition Commission of India and Ors. COMPAT Appeal
no.13 of 2014.
All India Tyre Dealers Federation V. Tyre Manufacturers 2013 COMP LR 0092 (CCI)
Inc. v. RWM Enters., 939 F.2d 547, 554 (8th Cir. 1991), In re Plywood Antitrust Litig., 655 F.2d
627, 634, 637 (5th Cir. 1981)
JFE Engineering v Commission [2004] ECR II-2501
M/s International Cylinder (P) Ltd. and Others v. Competition Commission of India and Others,
2014 Comp. L.R. 184 (CompAT)
In Re :Aluminium Phosphide Tablets Manufacturers (2012) Case No 02 of 2011 (CCI);
Royal Agency and Ors v Chemists and Druggists Association and Ors Case No 63 of 2015
(CCI).

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Delhi Jal Board v. Grasim Industries 2017 SCC OnLine CCI 48

India Glycols Ltd vs Indian Sugar Mills Association, CCI Case No. 94 of 2014.
Sh. Neeraj Malhotra, Advocate Vs. Deustche Post Bank Home Finance Limited (Deustche
Bank) and Ors., [2011]106SC L108(CCI)
Competition Commission of India Vs. Co-ordination Committee of Artists and Ors.
Northern Pacific R. Co. v. United States, 356 U. S. 1, 5 (1958), Broadcast Music, Inc. v.
Columbia Broadcasting System, Inc., 441 U. S. 1 , 19, n. 33 (1979).
Groupement des Cartes Bancaires v Commission, C-67/13 P, ECLI:EU:C:2014:2204, paragraph
50-51; Dole Food and Dole Fresh Fruit Europe v Commission, C-286/13 P,
ECLI:EU:C:2015:184, paragraph 114-115.
National Insurance Company Ltd. and Ors. v. Competition Commission of India−MANU
/TA/0060/2016
In In re Text Messaging Antitrust Litigation, (7th Cir.2010) 630 F.3d 622
British Sugar OJ [1999] L 76/1
Rajasthan Cylinders and Containers Limited Vs. Union of India and Ors. 2018 SCCOnLine SC
1718
Motion Pictures Association v. Reliance Big Entertainment Pvt Ltd , 2013 CompLR 466
(CompAT).
Huls AG v. Commission [1999] ECR I-4287
City of Tuscaloosa v. Harcros Chem., Inc, (11th Cir. 1998) 158 F.3d 548, 565

WEBSITES REFFERED

www.manupatra.com
www.scconline.com
www.cyrilamarchandblogs.com
www.justice.gov
www.oecd.org

ARTICLES, REPORTS & RESEARCH PAPERS

Potential Pro-Competitive And Anti-Competitive Aspects Of Trade/Business

Associations, OECD Policy Roundtables: Trade Associations,
DAF/COMP(2007)45, 4 November 2008

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Prosecuting Cartels without Direct Evidence, OECD Policy Roundtables, 11-Sep-

2006, DAF/COMP/GF(2006)
Craig W. Conrath (2003) “Practical Handbook of Antimonopoly Law
Enforcement for Economies in Transition or Development”, Department of Justice
(DOJ).
Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and
What to Look For, Antitrust Division, U.S. Dept. of Justice (Feb. 18, 2019, 10:10
PM),

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STATEMENT OF JURISDICTION

THE APPELLANTS ARE BEFORE THE HON’BLE NATIONAL COMPANY LAW

APPELLATE TRIBUNAL IN APPEAL TO THE ORDER PROVIDED BY THE
COMPETITION COMISSION OF PACEDENA UNDER SECTION 53B OF THE
COMPETITION ACT OF PACEDENA, 2002, PURSUANT TO THE REPORT SUBMITTED
BY THE LD. DIRECTOR GENERAL (DG) UNDER SECTION 26(3) OF THE ACT
AGAINST THE APELLANTS, UNDER SECTION 19(1)(a) WHEREIN THE APPELLANTS
WERE FOUND TO BE IN CONTRAVENTION OF VARIOUS PROVISIONS OF THE ACT.

Section 53B.- Appeal to Appellate Tribunal

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(1) The Central Government or the State Government or a local authority

or enterprise or any person, aggrieved by any direction, decision or order
referred to in clause (a) of section 53A may prefer an appeal to the Appellate
Tribunal

BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

THE APPELLANTS HUMBLY AND RESPECTFULLY

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STATEMENT OF FACTS
1. The Republic of Pacedena is a developing country having its capital at Melhi. The laws of
Pacedena are parimateria with the laws of India. As such, the date when the provisions of the
Competition Act were notified in India, the very same day, those parimateria provisions were
also notified in Pacedena.

2. PNR is the single largest buyer of goods and services in Pacadena; attracting established-
foreign-companies to participate in tenders floated by PNR. PNR issues specifications for
each good and service that it procures by means of issuing tenders. PNR procures only one
kind of recycled-wood tables. Goods and services are sourced from the specific and approved
suppliers only.

3. There are three leading recycled-wood table companies in Pacedena: (i) PG Pacedena Private
Limited (“PG”), (ii) Qui Pacedena Private Limited (“Qui”) and (iii) Tam Pacedena Private
Limited (“Tam”). The market share of each of them in the recycled-wood table market
(pertaining to PNR) is 25%, 45% and 30% respectively. PG and Qui are multi-product
companies and substantial part of their turnover is from export sales.

4. PG and Qui have their holding companies in UTA and became an approved supplier of
recycled-wood tables to PNR in 2000 and 2003 respectively. Tam is a Pacadena based
company and became approved supplier of recycled-wood tables to PNR in 2006. The three
companies have been participating in tenders floated by PNR. The sealed-bids are submitted
individually by PG, Qui and Tam. The key elements of the procurement process:
a) These are tenders for annual procurement
b) Floats tenders and invites sealed bids/quotations by a fixed date.
c) PNR opens the sealed-bids.
d) The winning bidder is chosen as a result of competitive bidding and price, after commercial
negotiations.

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5. There was a UTA newspaper report in 2016 that five manufacturers and suppliers of
recycled-wood tables may have engaged in cartel and big-rigging since 2000 in UTA. Based
on the report, PNR conducted an internal investigation and found that two of the companies
named in the report participate in tenders floated by PNR for recycled-wood tables. Based on
the same; PNR decided to conduct a study of price-bids quoted by PG, Qui and Tam since
2003 and reached a conclusion that aside from similar (sometimes same) prices there was
substantial increase in bid-prices of recycled-wood tables submitted by PG, Qui and Tam.
PNR filed a Reference against the suppliers of recycled-wood tables to PNR in Pacedena
under Section 19 of the Competition Act.

6. The CCP took cognizance of the Reference, passed an order under Section 26(1) of the
Competition Act and directed DG to initiate investigation into the matter in 2017.

7. On investigation of suppliers of recycled-wood tables in 2018 and rigorous analysis for more
than 9 months (which included depositions of senior management personnel of the recycled-
wood table companies); the DG report found that the suppliers of recycled-wood tables have
engaged in bid-rigging in by PNR between 2000 to 2018. The key findings of the report are
as under:
a) The two recycled-wood table companies from UTA were found in violation of competition
laws in UTA and penalties were imposed in 2018;
b) The tenders were floated on an annual basis. While the prices were decided every year, the
supply of the recycled-wood tables used to be once in every three months.
c) The price-bids submitted by all the three companies. The tables have been attached here with
as ANNEXURE I.
d) Cost of recycled-wood tables for each of the companies was marginally different based on
place of factory for each.
e) The average annual procurement of recycled-wood tables by PNR is around PR 78 crores.
f) Ledger accounts of these three suppliers of recycled-wood tables evidenced commercial
dealings with each other.

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g) There was also a trade association which existed since 2005 wherein all the recycled-wood
table manufacturers (including the three suppliers to PNR) were members. PG, Qui and Tam
used to meet at the trade association meetings. The said trade association is still operational.
h) The prices of certain kind of recycled-wood tables by other companies of Pacadena (i.e.
ANA and KDS – not eligible for PNR tenders) were also collected and their prices were in
the range of PR 120/ table (from the years 2013-2016).
i) The prices of certain kind of recycled-wood tables PG, Qui and Tam to enterprises other than
PNR was also in the range of PR 112/ table to PR 130/ table (from the year 2009 to 2017
respectively).
j) Based on the above, the DG concluded that there was an agreement between PG, Qui and
Tam, engaged in big rigging, in violation of Section 3(3)(d) of the Competition Act.

8. Post the DG report, an opportunity was given to appellants to provide their oral and written
objections on the DG report. Post the objections, CCP, principally upon close examination of
DG Report held that the case is made out under Section 3(1) read with sections 3(3)(a), 3(3)
(c) and (3(3)(d) against the appellants.

9. CCP notes that the infringing anti-competitive conduct of the parties pertain to cartel and bid
rigging in respect of the tenders floated by PNR and as such, for the purposes of determining
the relevant turnover for this infringement, revenue from tables has to be taken into account.

10. CCP decided to impose penalty on Qui, PG and Tam at the rate of 10% of their average
relevant turnover of the preceding three financial years from sale of tables. The tables have
been attached here with as ANNEXURE II.

11. CCP also decided to impose penalty on trade association at the rate of 10% of their average
income based (on their Income and Expenditure account) for the three preceding financial
years as filed by them. While, calculation is on the basis of Turnover from tables. The tables
have been attached here with as APPENDIX III

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12. Aggrieved by the said order of the CCP, PG, Qui, Tam and trade association filed appeals
before the National Company Law Appellate Tribunal in Melhi.
ANNEXURE I ANNEXURE II

ANNEXURE III

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STATEMENT OF ISSUES

THE RESPONDENTS HAVE PLACED BEFORE THIS HONOURABLE TRIBUNAL,

THE FOLLOWING ISSUES FOR ITS CONSIDERATION:

ISSUE I. Appellants have entered into an anticompetitive agreement as per Section 3 of the Act.

ISSUE II. Appellants’ anticompetitive agreement have contravened section 3 (3) (a), (c) and (d)
of the Act.

ISSUE III. Appreciable Adverse Effects on Competition also exist as per Section 19(3) of the
Act.

ISSUE IV. Penalties imposed are appropriate according to the gravity and effect of the
contravention.

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SUMMARY OF ARGUMENTS

Issue I: Appellants have entered into an anticompetitive agreement as per Section 3 of the
Act.

It is submitted to the Hon’ble Tribunal that the Appellants have entered into an
anticompetitive agreement as per Section 3(1) and section 3(3) of the Competition Act,
2002 (hereinafter the Act). Firstly, as the prerequisites of horizontal anticompetitive
agreement are fulfilled i.e. the agreement is between enterprises and an association of
enterprises with respect to identical goods and services. Secondly, the term agreement has
been given a wide ambit to include tacit agreements. Thirdly, such agreements can be
inferred by conduct of the parties and other circumstantial evidence as the standard of
proof to be applied is preponderance of probabilities. Fourthly, in the given set of facts,
multiple such evidences are gathered by way of parallel pricing and plus factors.

Issue II: Appellants’ anticompetitive agreement have contravened section 3 (3) (a), (c) and
(d) of the Act.
It is furthered to the Hon’ble Tribunal that the agreement as previously established has
negatively manipulated the tender process with respect to PNR. The prices have moved
in a gridlocked manner and artificially increased the prices. Moreover, the classic
patterns of bid rigging exist in addition to the allocation of the single consumer by way
of duration. Such manipulation of the bidding process has significantly reduced the
competitiveness in the market as well as the practical agency of the procurer to make
pricing and other decisions in a truly free manner.
The anti-competitive effect has been caused as part of the bid-rigging scheme, whereby
not only have the prices been manipulate din a manner far removed form the normal
functioning of the market, the sharing of tenders remain a forced feature of market
allocation.

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Issue III: Appreciable Adverse Effects on Competition also exist as per Section 19(3) of the
Act.

It is submitted to the Hon’ble Tribunal that the Commission has established the case of
contravention of Section 3(3), and is therefore not required, as per the scheme of the
Act to establish simultaneously or in addition that AAEC is being caused as per Section
19(3) of the Act. The commission would therefore present the alternative submissions
in the exigency of rebuttal of the presumption of Section 3(3). The Commission
submits that the Appellants have not only created hindrances in the entrance survival in
the market as they have created an artificial increase in prices, but they have also
significantly caused losses instead of accrual of benefits to consumers.

Issue IV: Penalties imposed are appropriate according to the gravity and effect of the
contravention.

1. It is submitted that the Commission holds the discretion to impose penalties as it may
deem fit provided that it is within the 10% cap as imposed by Section 27(b). After the
amendment, the word “shall” was substituted by the word “may” in order to give effect to
such discretion. The penalty provided under Section 27(b) covers “not more than ten
percent of the average of the turnover for the last three preceding financial years”. Thus,
after establishing a contravention of Section 3 of the Act, the CCP imposed a penalty on
10% of the average relevant turnover arising out of sale of tables. It may be noted that the
twin objectives behind imposition of penalties are: (a) to reflect the seriousness of the
infringement; and (b) to ensure that the threat of penalties will deter the infringing
undertakings. Therefore, the quantum of penalties imposed must correspond with the
gravity of the offence and the same must be determined after having due regard to the
mitigating and aggravating circumstances of the case.

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ARGUMENTS ADVANCED

I. Appellants are guilty of anticompetitive agreement under Section 3:

It is submitted to the Hon’ble Tribunal that the Appellants have entered into an
anticompetitive agreement as per Section 3(1) and section 3(3) of the Competition Act,
2002 (hereinafter the Act). Firstly, as the prerequisites of horizontal anticompetitive
agreement are fulfilled i.e. the agreement is between enterprises and an association of
enterprises with respect to identical goods and services. Secondly, the term agreement has
been given a wide ambit to include tacit agreements. Thirdly, such agreements can be
inferred by conduct of the parties and other circumstantial evidence as the standard of
proof to be applied is preponderance of probabilities. Fourthly, in the given set of facts,
multiple such evidences are gathered by way of parallel pricing and plus factors.
i. Prerequisites of Section 3(1) read with 3(3) are fulfilled:
1. It is humbly submitted to the Hon’ble Tribunal that the requirements of Section 3(1)
read with section 3(3) falls into three: an agreement, as shall be further elaborated upon,
that is between enterprises or persons or associations of enterprises or persons that shall
be engaged in “identical or similar trade of goods or provision of services”.
2. It is submitted that PG, Qui, and Tam are enterprises 1 as under Section 3(1) of the Act
as they are engaged in the supply of manufactured wood tables. And further the Trade
association qualify as an association of such enterprises under Section 3.
3. It is also a prerequisite that the enterprises be engaged in direct competition with other,
i.e. be horizontally located to create such horizontal anti-competitive agreement 2 which
Section 3(1) and 3(2) declare as void. It is therefore submitted that as the appellant
enterprises are leading manufacturers of recycled wood tables3 and supplying the same
to PNR, is established that they are engaged in “identical or similar trade of goods or
provision of services”4.

1
The Competition Act, 2002, Section 2(h).
2
 Schwegmann Bros. v. Calvert Corp., 341 U. S. 384.
3
¶ 4, Moot Proposition.
4
The Competition Act, Section 3(3).

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4. Is further submitted that in deciding upon a contravention of section 3(3) the

commission is required to establish only such agreement which creates AAEC as
mentioned under section 3(3) (a), (b), (c) or (d). The onus therefore is to show that there
is an agreement and such agreements hold the potential of affecting markets5.
ii. Wide ambit of an anti-competitive agreement as per Section 3-
1. It is humbly submitted to the Hon’ble tribunal that term agreement has been succinctly
defined in the Act6 with emphasis on its wide nature so as to prevent a restriction of its
applicability to only written agreements7. Formal or written arrangements are therefore not
required8 to be proved by the Commission to show adverse effects of even informal or tacit
arrangements9.
2. The definition, being inclusive and not exhaustive, is a wide one. An understanding may be
tacit and the definition under Section 2(b) of the Act covers even those situations where
parties act on the basis of a nod or a wink10. Furthermore, Section 3(3) apprehends both
agreements as well as practices of a concerted nature, and decisions which may be anti-
competitive in their effect.
3. Under Article 101 of Treaty on the Functioning of European Union, a provision
corresponding to S. 3(1), agreements are similarly broadly interpreted and does not
necessitate a formal agreement to have been reached on all matters. They also specifically
include exchange of correspondence11. Therefore, any direct or indirect contact between
such enterprises whereby the effect of such contact is to influence the conduct of the
market constitutes concerted practice12.
iii. Circumstantial evidence and Preponderance of probabilities sufficient to prove
anticompetitive agreement:
1. It is submitted for consideration to the Hon’ble Tribunal that in light of the definition of the
term ‘agreement’, evidence must be assessed on the basis of benchmark of preponderance

5
Mr. Ramakant Kini v. Dr. L.H. Hiranandani Hospital, CCI Case No. 39/2012.
6
Section 2(b), Competition Act, 2002.
7
American Tobacco Co .v United States, 328 US 781, 785-788 (1946).
8
United States v. Paramount Pictures, Inc.,334 U.S. 131 (1948)
9
Builders Association of India v Cement Manufacturers Association and Ors, CCI Case No 29/2010 , In Re:
Alleged Cartelization by Cement Manufacturers RTPE 52 of 2006.
10
Technip SA v. SMS Holding (P) Ltd. & Ors.(2005) 5 SCC 465, Guinness PLC and Distillers Company PLC
11
Nintendo OJ [2003] L 255/33, Contact Data v. Commission [2009] ECRII-1021, Activision Blizzard Germany
GmbH v. Commission [2011] ECR I-419.
12
Suiker Unie v. Commission Cases 40/73[1975]ECR 1663.

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of probabilities13. It especially is a requirement for cartelization whereby the clandestine

nature of the activity will dictate that there will not be any express agreement. 14 An
agreement therefore, can be presumed on the basis of circumstances of a case15.
2. Evidences in cases of collusive agreements are categorized into direct and indirect
evidence. Circumstantial evidence consists of communication evidence and economic
evidence, which include firm conduct, market structure, and evidence of facilitating
practices16. It must also be noted that circumstantial evidence holds potent value in such
cloak and dagger cases wherein conduct of the parties holds the likelihood of collusive
agreements17.
3. Further, given that anticompetitive offences are civil offences18, the test of 'balance of
probabilities' is distinguished from 'beyond reasonable doubt' as envisaged under criminal
law19. ‘Balance of probabilities’ becomes the accepted standard, especially so in a case of
tacit collusion whereby hardly any concrete evidence of such activity will exist 20. The
reliance therefore is rightly placed upon circumstantial evidence to create plausibility 21, and
it has been an accepted practice to rely upon economic or indirect evidences to establish the
same.22
iv. Parallel Pricing and Plus Factors:
1. It is submitted to the Hon’ble Tribunal that in a market where the competition
may be close-knit the commission is required to be more vigilant to ensure the
preservation of existing levels of competition23.
2. In this regard, identical pricing becomes suspect in the absence of alternative
explanation especially so when it not a case of mere price parallelism. In the
13
 Escorts Limited and Ors. Vs. Competition Commission of India and Ors. COMPAT Appeal no.13 of 2014.
14
Hay, George A., "Anti-competitive Agreements: The Meaning of “Agreement”" (2013).Cornell Law Faculty
Working Papers.Paper 105.
15
All India Tyre Dealers Federation V. Tyre Manufacturers 2013 COMP LR 0092 (CCI)
16
Prosecuting Cartels without Direct Evidence, OECD Policy Roundtables, 11-Sep-2006, DAF/COMP/GF(2006)
17
Inc. v. RWM Enters., 939 F.2d 547, 554 (8th Cir. 1991), In re Plywood Antitrust Litig., 655 F.2d 627, 634, 637
(5th Cir. 1981)
18
JFE Engineering v Commission [2004] ECR II-2501
19
M/s International Cylinder (P) Ltd. and Others v. Competition Commission of India and Others, 2014 Comp.
L.R. 184 (CompAT)
20
In Re :Aluminium Phosphide Tablets Manufacturers (2012) Case No 02 of 2011 (CCI); Royal Agency and Ors v
Chemists and Druggists Association and Ors Case No 63 of 2015 (CCI).
21
Craig W. Conrath (2003) “Practical Handbook of Antimonopoly Law Enforcement for Economies in Transition or
Development”, Department of Justice (DOJ).
22
In In re Text Messaging Antitrust Litigation, (7th Cir.2010) 630 F.3d 622
23
British Sugar OJ [1999] L 76/1

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given instance, the data for the bidding process not only shows price parallelism
but also substantial and simultaneous increase in bid prices 24. This in effect has set
the facts at hand beyond the threshold of mere parallelism that was set by The
Hon’ble Supreme Court to show cartel conduct25.
3. There also exist plus factors as the appellants have a common platform viz the
Trade Association. It is submitted that in the case of tacit agreements,
organizations of common membership serve as platforms for facilitating anti-
competitive agreements26.
4. The appellant enterprises have had the Trade Association as a common platform
through their membership to the same27. Trade associations as platforms for
meetings and discussion of industry trends and prices are exposed to antitrust
risks, despite their pro-competitive aspects28.
5. Another plus factor are the commercial dealings between the enterprises. As
parallel pricing is further compounded by the findings of the ledger account of the
three enterprises, whereby there is clear evidence of commercial dealings with
each other29.
6. It is submitted that such contact alleviates the possibilities and extent of collusion
between the appellants, especially as it would specifically allow for discussion of
pricing policies. This can be seen logically as especially TAM is not a
multiproduct company30 and any commercial dealings it would have with PG or
Qui would necessarily deal with recycled wood tables. Therefore, all these
instances of contact allow for such a anticompetitive conduct to follow31.
7. Coordinated Price Increase: it must be noted that maintenance of the price
increase in tandem with each other year after year reinforces the absence of
alternative justification32. It is therefore an extension of parallel pricing which is

24
¶10 (c), Moot Proposition.
25
Rajasthan Cylinders and Containers Limited Vs. Union of India and Ors. 2018 SCCOnLine SC 1718
26
Motion Pictures Association v. Reliance Big Entertainment Pvt Ltd , 2013 CompLR 466 (CompAT).
27
¶10 (g), Moot Proposition.
28
Potential Pro-Competitive and Anti-Competitive Aspects Of Trade/Business Associations, Directorate For
Financial And Enterprise Affairs Competition Committee, OECD Policy Roundtables, DAF/COMP(2007)45
29
¶10 (f), Moot Proposition.
30
¶4, Moot Proposition.
31
Huls AG v. Commission [1999] ECR I-4287
32
City of Tuscaloosa v. Harcros Chem., Inc, (11th Cir. 1998) 158 F.3d 548, 565.

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commonly featured in conspiracy findings33. Price increase when it is not justified

by alternative factors shows a higher degree of coordination as opposed to a mere
market feature. Especially when it occurs in as precise a fashion as that in the
years 2010-13 and again in 2014-2017 in the given instance 34. This increasein
prices is patently a counter movement to the normal scheme of demand and
supply whereby upon the fall of demand the prices are expected to fall. Au
contraire the prices have either significantly increased after the cancellation of
previous tenders a sin 200635, or have remained stable in alleviated price brackets.
II. Appellants’ anticompetitive agreement have contravened section 3 (3) (a), (c) and
(d) of the Act:
It is furthered to the Hon’ble Tribunal that the agreement as previously established has
negatively manipulated the tender process with respect to PNR. The prices have moved
in a gridlocked manner and artificially increased the prices. Moreover, the classic
patterns of bid rigging exist in addition to the allocation of the single consumer by way
of duration. Such manipulation of the bidding process has significantly reduced the
competitiveness in the market as well as the practical agency of the procurer to make
pricing and other decisions in a truly free manner.
i. The appellants are guilty of price fixing:
1. Section 3(3)(a) makes any horizontal agreement which “directly or indirectly
determines purchase or sale prices” runs afoul of the law, and this regard, a fixing of
rates each year across all appellants, so as to increase and maintain such elevated
pricing is determined to be a contravention of Section 3(3)(a).
2. Price fixing therefore, refers to an agreement or conspiracy among competing firms to
raise, fix, or maintain the price of the goods or services they are selling 36. It takes
multiple forms including agreements not to lower prices or adherence to price
margins. It must be noted that identical prices may indicate a price-fixing conspiracy,
especially when:
33
Phillip E.Areeda &Herbert J.Hovenkamp, “Antitrust Law:An Analysis Of Antitrust Principles And Their
Application”para.1434(D)(2)(2d Ed. 2000)
34
¶10(c), Moot Proposition
35
¶10(c), Moot Proposition
36
Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and What to Look For, Antitrust
Division, U.S. Dept. of Justice (Feb. 18, 2019, 10:10 PM), https://www.justice.gov/atr/price-fixing-bid-rigging-and-
market-allocation-schemes#1

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(a) prices stay identical for long periods of time; or

(b) prices previously were different; or
(c) price increases do not appear to be supported by increased costs37.
3. It is submitted to the hon’ble tribunal, that the appellant parties have acted in concert to
determine the same rates at which the bids would be provided, as is apparent from the
data of bids quoted38. Initially, the prices remained set for the three enterprises at
119PR/Table for 2010, it was made to be static at 128PR/Table for 2011-2012.
Additionally, 137 PR/Table was fixed for 2015-2017.It is apparent that prices are moving
in a gridlock manner whereby the prices fixed for the bids are increasing and then being
maintained by agreement. This coordinated price increase is a clear instance of violation
of 3(3)(a).
ii. The Appellants have also allocated the tenders amongst themselves in an
anticompetitive manner:
1. It is submitted that the appellants have been involved in sharing of markets by
duration as per their arrangement of market sharing. The data analysis shows
archetypes of market sharing in 2007, 2010, 2012, and 201539. This has also been
coupled with tenders being obtained in turns by the parties.
2. In this regard, the Hon’ble tribunal must note the inclusive nature of Section 3(3) (c).
The statutory scheme has not been kept exhaustive as to the manner of market sharing
and will recognize other manners of market sharing apart from the ones explicitly
mentioned. Therefore, the conduct of the parties as to the receipt of tenders will be
well within durational manipulation.
iii. The Appellants are guilty of bid-rigging:
1. It is submitted according to Section 3(3)(d) of the Act, bid-rigging or collusive
bidding has statutorily determined to be anticompetitive. The act also defines the
practice in the following terms,
"bid rigging" means any agreement, between enterprises or persons referred to in
sub-section (3) engaged in identical or similar production or trading of goods or

37
Sh. Neeraj Malhotra, Advocate Vs. Deustche Post Bank Home Finance Limited (Deustche Bank) and Ors.,
[2011]106SC L108(CCI)
38
¶10 (c), Moot Proposition.
39
¶10 (c), Moot Proposition.

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provision of services, which has the effect of eliminating or reducing competition for
bids or adversely affecting or manipulating the process for bidding."40
2. The necessary ingredient of bid rigging, apart from an agreement and horizontal
relationship between the parties, is that the agreement has the effect of eliminating or
reducing competition of bids or adversely affect or manipulating the process for
bidding41. Richard Whish and David Bailey in their book 42 have categorized the
various forms of collusive bidding/bid rigging include:
(a) Level tendering/bidding (i.e. bidding at same price)
(b) Cover bidding/courtesy bidding.
(c) Bid rotation.
(d) Bid Allocation.
3. It is submitted that the Appellants have been manipulating the tendering process of
PNR by level tendering, allocating as per duration and rotating between themselves, the
said tenders. Level tendering has occurred over the span of ore than a decade with most
prominent identical submissions being made from 2010-18. Furthermore, the Appellant
enterprises have rotated the tenders by attempting to split them by effectively fixing the
number of parties and rates of negotiation.

III. Appreciable Adverse Effects on Competition exist as per Section 19 factors:

It is submitted to the Hon’ble Tribunal that the Commission has established the case of
contravention of Section 3(3), and is therefore not required, as per the scheme of the
Act to establish simultaneously or in addition that AAEC is being caused as per Section
19(3) of the Act. The commission would therefore present the alternative submissions
in the exigency of rebuttal of the presumption of Section 3(3). The Commission
submits that the Appellants have not only created hindrances in the entrance survival in
the market as they have created an artificial increase in prices, but they have also
significantly caused losses instead of accrual of benefits to consumers.
i. Presumption of Appreciable Adverse Effect under section 3(3):

40
Competition Act, 2002, Section 3(3)(d), Explanation.
41
Supra, note 25.
42
Richard Whish and David Bailey, Competition Law, 8th edn, OUP 2015.

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1. Sub-section (3), stipulates four kinds of agreements which are presumed to have
appreciable adverse effect on competition. Therefore, if a particular agreement comes in
any of the said categories, it is per se treated as adversely affecting the competition to an
appreciable extent43 and comes within the mischief of sub-section (1). The per se rule holds
that certain agreements have such predictable and pernicious anticompetitive effect, and
such limited potential for procompetitive benefit, that they are deemed unlawful per se44.
There is no further need to have actual proof as to whether it has caused appreciable effect
on competition45.
2. Therefore, the scheme of section 3(3) differs from the necessity that is imposed by Section
3(4) whereby the commission is bound to make the effects based analysis according to the
six factors of Section 19(3), in reaching such conclusion of AAEC.
3. It is submitted that the same principle if followed by the European Commission and arises
from the fact that certain types of coordination between undertakings can be regarded, by
their very nature, as being harmful to the proper functioning of normal competition.46
4. The COMPAT has also previously held 47 that the presumption under Section 3(3) of the
Act takes away the applicability of rule of reason. Presumption in a substantive law is
irrefutable and conclusive. Once a conclusion of violation of Section 3(3) is reached,
contravention of Section 3(1) of the Act is also established.
ii. Section 19(3) factors stand not rebutted:
1. Significantly, it must be noted that as per the case of Rajasthan Cylinders and Containers
Limited Vs. Union of India and Ors. 48, the Commission is not required to further a case of
contravention under Section 19(3) when the ingredients of Section 3(3) have been
adequately satisfied. Therefore, It is humbly submitted to the Hon’ble Tribunal that in the
alternative of section 3(3) contravention, the appellants have led to the adverse effect of
competition as per the scheme of Section 19(3) of the Act.

43
Competition Commission of India Vs. Co-ordination Committee of Artists and Ors.
44
Northern Pacific R. Co. v. United States, 356 U. S. 1, 5 (1958), Broadcast Music, Inc. v. Columbia Broadcasting
System, Inc., 441 U. S. 1 , 19, n. 33 (1979).
45
Supra, note 42.
46
Groupement des Cartes Bancaires v Commission, C-67/13 P, ECLI:EU:C:2014:2204, paragraph 50-51; Dole
Food and Dole Fresh Fruit Europe v Commission, C-286/13 P, ECLI:EU:C:2015:184, paragraph 114-115.
47
National Insurance Company Ltd. and Ors. v. Competition Commission of India−MANU /TA/0060/2016
48
Supra, note 25.

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2. Section 19(3) postulates both negative factors, from sub-section a to c, followed by

positive factors as provided by sub-sections d to f. With respect to Section 19(3)(c), that
the cartel that exists between the Appellant enterprises is creating hindrances to an easy
entry and survival in the market.
3. Further, one of the factors is 'accrual of benefits to the consumers' 49. It is humbly
submitted that that instead of leading to any such effect, the enterprises have had a
severely negative impact on it. Accrual of benefit to consumer cannot be viewed only
from the perspective of continuous supply of the tendered product or supply at negotiated
price. The procurement should be at a competitive price, more so when the procurer is a
public authority. When the bids are quoted pursuant to a collusive action by the bidders,
even post bid negotiations cannot guarantee lowest rates because the procurer cannot
ascertain the most competitive price prevalent in the market. This causes loss to the
public exchequer and, in turn, harms the public at large50.

IV. Penalties imposed are appropriate according to the gravity and effect of the
contravention:
2. It is submitted that the Commission holds the discretion to impose penalties 51 as it may
deem fit provided that it is within the 10% cap as imposed by Section 27(b). After the
amendment52, the word “shall” was substituted by the word “may” in order to give effect
to such discretion. The penalty provided under Section 27(b) covers “not more than ten
percent of the average of the turnover for the last three preceding financial years”. Thus,
after establishing a contravention of Section 3 of the Act, the CCP imposed a penalty on
10% of the average relevant turnover arising out of sale of tables53.
3. It may be noted that the twin objectives behind imposition of penalties are: (a) to reflect
the seriousness of the infringement; and (b) to ensure that the threat of penalties will deter
the infringing undertakings54. Therefore, the quantum of penalties imposed must

49
Section 19(3)(d), Competition Act.
50
Delhi Jal Board v. Grasim Industries 2017 SCC OnLine CCI 48
51
Central Act 39 of 2007
52
Central Act 39 of 2007
53
¶13, Moot Proposition.
54
¶12, Moot Proposition.

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correspond with the gravity of the offence and the same must be determined after having
due regard to the mitigating and aggravating circumstances of the case55.

i. Commission has followed the two-step process as set by Excel Crop:

1. In line with the decision of Excel Crop Care Limited v Competition Commission of India
and Another56, the commission has taken into account the ‘relevant turnover’ of the
products affected by the infringement. Since, PG and Qui were multi-product
companies57; adopting the criteria of relevant turnover of the company arising out of sale
of table does not include within its sweep the other products manufactured by the
company, unconnected with the infringement. It, therefore, held that penalty of 10%
would be limited to the product/service in question – in this case, the tables – which was
the relevant product for the enquiry. In so far as TAM is concerned, which is not a multi-
product company, the ‘relevant turnover’ and ‘total turnover’ is the same as this company
produced only tables. CCI had imposed penalty the basis of their turnover of this product.
2. In light of the above discussion a two-step calculation has to be followed while imposing
the penalty under Section 27 of the Act.
Step 1: Determination of Relevant Turnover: -
Firstly, Sales of tables highlight the turnover as pertaining to products and services that
have been affected by such contravention.
Secondly, Due regard to the entity’s audited financial statements or reliable records
reflecting the entity’s relevant turnover or estimate the relevant turnover based on DG’s
investigation is placed.
Step 2: Determination of Appropriate Percentage of Penalty Based on Aggravating
and Mitigating Circumstances: -
Following the EU categorisation of aggravating and mitigating circumstances 58, the CCP
has noted that mitigating circumstances are not present as-
-the mere fact that an undertaking participated in an infringement for a shorter duration
than others will not be regarded as a mitigating;

55
India Glycols Ltd vs Indian Sugar Mills Association, CCI Case No. 94 of 2014.
56
(2017) 8 SCC 47.
57
¶6, Moot Proposition.
58
Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of RegulationNo 1/2003, (2006/C
210/02).

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-the anti-competitive conduct of the undertaking has not been authorized or encouraged
by public authorities or by legislation.
- the quantum and nature of the penalty imposed pays particular attention to the need to
ensure that fines have a sufficiently deterrent effect;

ii. Profits form contravention are linked to heavy damage to Nation’s

economy:
1. Competition Appeal Court of South Africa in the case of Southern Pipeline Contractors
Conrite Walls (Pty) Ltd. v. The Competition Commission59 “there is a legislative link
between the damage caused and the profits which accrue from the cartel activity. The
inquiry appears to envisage that consideration be given to the benefits which accrue from
the contravention: that is to amount to affected turnover. By using the baseline of affected
turnover’ the implications of the doctrine of proportionality that is between the nature of
the offence and benefit derived therefrom, the interests of the consumer community and
the legitimate interests of the offender can be taken more carefully into account and
appropriately calibrated.”
2. It is submitted that in the cases of public procurement, savings to public treasuries are
interlinked with competitive procurement regimes. With respect to this, big-rigging by
cartels in public tenders leads to increased coasts not only to the procuring agency but to
the larger public. It is also noted that Government and its agencies have often limited
leverage due to the various administrative, procedural and accountability formalities that
they have to follow as compared to private sector. Thus, efficiency and cost saving are
necessary ingredients of the whole procurement process 60. Which are being undermined
by the price fixing and bid-rigging of the Appellants.
3. It is highlighted for the consideration of the Hon’ble Tribunal that the gravity of the
offence relates to the average annual procurement of recycled-wood tables by PNR,
which is around PR 78 crores. Any anticompetitive agreement adversely affecting such a
large procurement figures, that too, over the course of more than a decade is bound to be
taken as a most egregious contravention. Such conduct deprives not only the consumers

59
Case No. 105/CAC/Dec/10.
60
Cartel Enforcement and Competition, ICN Special Report, 2018.

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but the economy also from exploiting the optimal capacity utilisation and thereby
reducing prices.61
4. Furthermore, as the Trade Association has facilitated such cartelisation, as the platform
for such decisions, it has also been penalised for its role as per its average income, based
upon the Income and Expenditure Account62. The decision to impose a heavy penalty of
10% is not an unprecedented step and has been taken keeping in mind the seriousness of
the offence.

61
Case No. 29 of 2010
62
¶14, Moot Proposition.

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PRAYER OF RELIEF
 
It is humbly submitted before the Hon’ble National Company Law Appellate Tribunal, Melhi
that in the light of the facts stated, issues raised, arguments advanced and authorities cited, the
counsel of the respondent most humbly and respectfully prays that this Hon’ble Tribunal may
graciously be pleased to adjudge and declare that:
1. It upholds the order passed the Competition Commission of Pacadena.
 
Or pass any other order and make directions as the Hon’ble Tribunal may deem fit to meet
the interest of justice, equity and good conscience in the instant case.
And this for this act of kindness, appellant shall duty bound forever pray.
 
 
Respectfully submitted by:
Place: Melhi, Pacedena COUNSEL ON BEHALF OF THE RESPONDENT
Date: 23rd February, 2019

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